Google parent Alphabet is in talks with state oil giant Saudi Aramco about jointly building a technology hub in Saudi Arabia, the Wall Street Journal reported, citing people familiar with the matter. As part of the potential joint venture, Alphabet would help Aramco to build data centres around Saudi Arabia, the people said. It is not clear specifically whose data the centres would house or who would control them.
The size of the potential joint venture between Alphabet and Aramco is unclear, although it could be big enough to become listed on Saudi Arabia's stock exchange, according to the Journal report. It is also still unclear where Aramco will list its shares ahead of an IPO that could make it the world’s largest publicly traded company. Saudi Arabia is embarking upon an ambitious plan, led by Crown Prince Mohammed bin Salman, to diversify the nation's oil-dependent economy.
The foundation of the effort is a plan to create a huge sovereign wealth fund, underwritten by selling shares in state-owned Aramco. The initial public offering, which could happen in 2018, is expected to be the world's biggest-ever share sale. Aramco CEO Amin Nasser recently told CNBC his company is ready for the IPO this year, but is waiting for the government to choose an international list venue.
Alphabet and Aramco have discussed forming a joint venture that would build data centres around the country, sources familiar with the matter tell the Journal. The talks have been going on for months and have involved Alphabet CEO Larry Page, the Journal reports.
A network of data centres could provide the backbone for a burgeoning tech industry in the kingdom, the newspaper commented. The Journal notes that data centres in Europe currently service Saudi Arabia via undersea cables, an arrangement that slows down traffic.
